Financial Fact Friday

The “Penny Gap” in Production:
Many people don’t realize that the cost of producing a penny (the U.S. one-cent coin) often exceeds its face value. For several years, the production and distribution cost for the penny has been more than one cent. As of the data available up to 2021, it cost about 1.7 cents to produce a penny, which means the U.S. government loses money for every penny minted. This disparity between production cost and face value has led to ongoing debates about whether to eliminate the penny from circulation entirely.

This “negative seigniorage” (where the cost to produce a coin is greater than its monetary value) is a fascinating financial quirk that many are unaware of.